FINRA’s Department of Enforcement investigated Petro’s alleged misconduct and found he exercised discretion and unauthorized trades on behalf of at least four of his customers. Specifically, between December 2013 and January 2014, Petro executed multiple unauthorized trades in Bank of America stock in the accounts of four customers. FINRA notes the customers did not provide Petro with explicit instructions to place those trades, but had verbally granted Petro discretionary trading authority in their accounts.
In addition, during the relevant time period, Merrill Lynch did not permit its registered representatives to solicit investments in its parent company, Bank of America. As detailed above, Petro executed solicited trades in Bank of America stock in the four customers’ accounts. To make matters worse, Petro marked the order tickets for ten trades in Bank of America as unsolicited when, in fact, the trades were solicited because his customers did not initiate the trades.
Based upon the foregoing misconduct, FINRA alleged Petro violated NASD Rule 2510(b), as well as FINRA Rules 2010 and 4511. For example, NASD Rule 2510 prohibits a registered representative from exercising any discretionary authority in a customer’s account unless such customer has provided prior written authorization and the account has been accepted by a FINRA member. In cases where a financial advisor executes unauthorized trades without proper authorization, the financial advisor and brokerage firm may be found liable, as well as disciplined by securities regulators such as the case here.
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. If you suffered investment damages with Petro through Merrill Lynch, you may be able to recover your losses through FINRA arbitration. Please contact us for a free, no-commitment initial consultation or contact one of our attorneys at (800) 627-2179 to schedule a free consultation or complete our free case evaluator.